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January 18, 2017 | Kevin McNew | Views: 183
January 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 236

Beans Post Small Loss Overnight

Crude Oil Was Seeing Big Losses

Beans posted a small loss overnight taking a break from its 3-day rally of over 60 cents a bushel. Corn and wheat were little changed heading into the morning break. In outside markets, crude oil was seeing big losses while the US dollar and equity futures were in positive territory.


Conditions will trend much drier for much of central and northern Argentina over the next 7 to 10 days. Some of the wettest locations from Cordoba east through Entre Rios will have plenty of opportunity to dry out. This will lead to improvements in crop conditions. Meanwhile, Brazil continues to have good conditions for crop development.


On Tuesday, NOPA released their crush estimate for member plants in December. Their report showed 160.2 MB of soybeans were crushed in December, falling well short of the 162.8 MB that had been expected. Stocks of soybean oil also ballooned to 1.434 billion pounds, above trade estimates of only 1.352.


In wheat news, Minneapolis wheat was sharply lower on Tuesday easing the white-hot spread to KC & Chi on heavy farmer sales. Overnight the Philippines bought feed wheat from Australia. Indonesia may see limited needs for importing wheat and corn feed grains as production there is up sharply on the year. Indonesia imported 2 MMT of feed wheat last year and 840,000 tonnes of corn.


The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

January 17, 2017 | Kevin McNew | Views: 293
January 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 258

Beans Come Back from 3 Day Weekend Trading Higher

Crude Oil Posted Solid Gains

Beans Come Back from 3 Day Weekend Trading Higher

Beans came back from the 3-day weekend trading sharply higher which helped bring corn and wheat along. In outside markets, the US dollar and equities traded sharply lower while crude oil posted solid gains.


USDA reported a 102,944 MT sale of corn to unknown destinations


Weather over the weekend was a driving catalyst for soybeans as 3 to 5 inches of rain fell in water-soaked areas of Argentina. Flooding resulted in parts of the region resulting in a new risk to some crop areas that either were still flooded from previous heavy rains or just recently experienced improving conditions. Most likely flooding occurred in areas that flooded earlier this summer and new damage to crops may be somewhat limited.


In negative developments, China is said to have cancelled 7 cargos of US ethanol as tariffs start to take effect.  The tariff is expected to rise to 30% from its current level of 5%, essentially imposing a blockade on US shipments.


In export news, Japan was in the market for 117,605 MT of milling wheat with the results expected Thursday. The Philippines were also trying to source 165,000 MT of feed wheat.


The US dollar hit its lowest mark in a month as British Prime Minister May promised a parliamentary vote on Britain's deal to leave the European Union and stressed it would seek to stay a key European partner. This bolstered the Sterling giving it the biggest jump since the June Brexit vote.


The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

January 13, 2017 | Kevin McNew | Views: 162
January 13, 2017 | Grain Hedge Insights | Kevin McNew | Views: 118

Weekly Cash Comments

Weekly Cash Commentary for week ending 01/13/2017

Basis levels were mostly unchanged for corn across the US this past week, while soybean basis nudged lower on the late week strength in futures.


Basis levels at river terminals had the most weakness as a slowing bean export program has started to deflate basis levels. For the week, soy basis at river terminals dipped nearly 3 cents with key terminals along the IL River off 5 to 7 cents. For corn, there were some modest gains of 1 to 2 cents along the MS River terminals but IL River terminals were mostly 3 to 5 lower.


For end users, corn plants were mostly steady on the week with notable movement while soy crushing facilities were slightly weaker.


With soy futures leaping higher at the end of the week basis levels for beans may come under more pressure from active farmer sales. However, corn stocks held by farmers continue to be record large which will keep corn basis on the defensive as well between now and spring.


The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

January 13, 2017 | Grain Hedge Insights | Kevin McNew | Views: 427

USDA Caught the Trade By Surprise Yesterday

Grains Resume their Slump in the Overnight

Grains resumed their slump overnight following yesterday’s sharp rally in beans and modest bump in wheat prices buoyed by USDA data. In outside markets, crude oil and the US dollar fell in the night session while US equity futures were trying to hold on to slim gains.


USDA caught the trade by surprise yesterday when it trimmed US soy output on lower acres and yield forecasts. The net result was a 54 MB drop in production which cut ending stocks from 480 MB last month to 420 MB this month. USDA also dropped their US corn yield and acres forecast, helping lower production by a slim 78 MB.


However, on the bearish side, the Quarterly stocks report showed bigger than expected corn and wheat inventories, which implied lower feed use than what USDA had been projecting. Dec 1 stocks implied 1st quarter (Sept-Nov) U.S. corn feed/residual usage at 2.280 billion bushels, up just 4.6% from last year’s 2.179 billion. Corn for feed use was dropped by 50 MB to 5,600 which still reflects a 9.1% annual increase over 2015, while Q1 feed use was up only 4.6%.  Wheat feed use was also lowered by 35 MB to 225.

The only bright spot on wheat was the steeper than expected drop in US winter wheat plantings, plunging 3.8 million acres over last year while the trade expected only a 2 million acre cut. This would be the lowest plantings in 107 years. Nonetheless, global supplies continued to mount with world carry-out ballooning to 252 MMT up from 251 MMT last month on increased production in Russia and Argentina.  


Going forward, the trade will continue to focus on SA’s growing season. Portions of central Argentina will still be affected by heavy rain this
weekend and more flooding is probable. But, Brazil continues to see nearly ideal conditions. Also, with wheat plantings “known” traders will start to conjecture about US spring acres, with farmers believed to be heavily biased towards 4 to 6 million more acres of soybeans in 2017.


The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

January 12, 2017 | Kevin McNew | Views: 231
January 12, 2017 | Tech Talk | Charlie Trauger | Views: 1280

Rural Broadband Issues – Slow and Bumpy Digital Roads!

Rural America still has major connectivity problems as it trys to participate in the modern age

Rural Broadband Issues – Slow and Bumpy Digital Roads!

I moved from Omaha, NE, to the small town that I grew up in four years ago. I work in the software industry and had hoped that technology today would provide me with a good solid Internet connection allowing me to live where I want to and be connected. I wonder if I am not alone with this wish as things are not that great here.

While in a larger city, we rarely experienced any interruptions or degraded Internet service. I realize that our neighborhood had fiber optics up to our house, so one would expect things to be fast and work. Not quite the case in rural America.

Our digital needs today touch most every aspect of our personal and business lives, like it or not, we need to be connected. Lately, my Internet provider has experienced many down days due to equipment issues. We are always a few days out on the service schedule as I assume tech teams come from a larger city, which is frustrating.

When things do work, connections seem to always be too slow. Rural providers have oversold the local network with too small of a backhaul or the pipe that connects all of us back to the Internet. I realize that the population is less in small towns and the country, but we rely on being connected just as much as anyone else does and deserve much better service!

Economic development in rural America, in my opinion, depends on decent Internet connectivity. If we want to attract more young folks, they certainly won’t put up with slow and spotty connections. We are nowhere close to what our friends in the city have for connectivity. Pretty hard to cut the cable or satellite TV and stream content when the pipes are slow and full!

The Ag Department’s $3 Billion Rural Broadband Initiative’s Program has fallen short — great idea, but poor execution. http://www.informationweek.com/government/mobile-and-wireless/federal-broadband-program-falls-short/d/d-id/1278662


So, what can we expect down the road for those of us that are in rural areas? I realize there are satellite options, and I have tried them. They limit or charge more for the amount of data used and there tends to be some keyboard delays. I realize your requests are traveling some 26K miles up and back again to the bird. If there are no other solutions, then you settle.

The small town I live in does have dark fiber (not lit up, but could be), but requires several thousand per month to crank it up. Just a bit above my budget for gigabit speeds! There are companies that are working on solutions, such as ViaSat – you can check out a nice video at this link; https://www.youtube.com/watch?v=pIdn5RmUwWs&feature=youtu.be and others as well I am sure.

Facebook’s CEO, Mark Zuckerberg is working on providing connectivity world-wide as well. The site https://info.internet.org/en/ show’s some pictures assumed to be in third-world countries, but I would really like good solid access in Nebraska! Usually, big problems get fixed, but with lower populations, we are apparently second or third in line for help.

Here is a great read regarding high-speed Internet access by Sara Kubik – pretty much says it all; http://www.lawtechnologytoday.org/2016/07/high-speed-internet-access-not-basic-right-2/

Here is a map showing the connectivity holes in the U.S. https://www.inverse.com/article/14248-will-cheap-broadband-actually-make-it-to-rural-america-here-s-how-it-might-happen

I will keep an eye open for potential solutions and report back. In the mean-time, I wait somewhat, OK completely impatiently! Drop us an email if you have found a great solution provider for us rural folks and I will check into it and add to a future blog. 


Charlie Trauger is Global Director of Agriculture for GlobalView Software, Inc. of Chicago IL.  He received his Bachelor of Science degree from the University of Nebraska and also completed course work in computer science from Metropolitan Technical College in Omaha, NE.  Charlie was raised on a row crop and cow calf operation in Nebraska and is still involved in the family business.  Charlie has spent over 25 years in the agricultural software and data business and recently relocated back to the family farm in Nebraska. Follow him on Twitter @charlietraug

January 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 179

Grains Drift Lower While Awaiting Fresh Data from USDA

Crude Oil Moved Higher in the Night Session

Grains drifted lower overnight ahead of fresh data from USDA at 11 am CDT. Meanwhile, crude oil moved higher while the US dollar was sharply lower in the night session.


USDA announced a 110,000 MT of of corn to Japan, and another 253,488 MT to unknown destinations.


Following yesterday’s announcement that China would impose high tariffs on US DDGs imports, a think tank there has said it expects purchasing of the feedstuffs to slow. Imports for 2016/17 were previously seen at 2 MMT, said the China National Grain and Oils Information Center. They expect that number to slide to below 1 MMT, but that will likely boost soymeal and soybean demand.


In wheat, the 2017 rally took a hit yesterday as prices slid for a third session on improved weather in the US Plains and Black Sea region. Wheat is being pressured by expectations that weekend storms would help recharge soil moisture in Oklahoma and Kansas, where dry conditions have stressed dormant hard red winter wheat crops. Also, a substantial snow layer has protected Ukrainian and Russian winter crops from severe frosts which came this weekend.

South Korea's Major Feedmill Group has rejected all offers and made no purchase in an international tender to buy up to 70,000 tonnes of corn from optional origins, sighting prices that were too high. The lowest offer in the tender was $189.95 a tonne c&f on a flat price basis.


The US Dollar hit a 5-week low as President-elect Donald Trump’s first press conference was ambiguous on the direction of new policy initiatives, disappointing the trade on the Trumponomic bullish bet that has been in play since the election.


Weekly Export Sales-

                                     Actual         Expected

Corn                                603             500-800

Soybeans                         349             500-800

Wheat                             391             250-450


Oil rose on Wednesday, lifted by reports of Saudi supply cuts to Asia, but gains were capped by a lack of detail about the reductions and because of signs of rising supplies from other producers. EIA crude stocks data is out later this morning with traders looking for a 1.1 million barrel build from last week.


The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

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